Current methods of point-of-sale (POS) financial payments force a consumer to possess and present some type of man-made token in order to make a purchase. The simplest financial token is cash, wherein the token, itself, has value. More sophisticated financial tokens include checks, credit cards, debit cards, and value cards. These tokens link their owners with financial accounts, wherein either the owner has deposited cash or has promised to deposit cash in the future.
There are various problems with these tokens. One, they can easily be lost, stolen, or fraudulently reproduced, leaving the token's owner vulnerable to financial loss. Two, they are expensive for financial institutions to create and eventually those fees get passed on to the token owner. Three, these tokens are inconvenient to carry. If a consumer wishes to make any type of purchase, they are forced to carry one or more of these tokens in order to do so. In addition, whether the token is a check, card, or cash, the owner is still forced to carry it in some type of book or wallet, adding to the owner's everyday carry load. Four, although tokens such as credit and debit cards are thin and rather small, which aides their convenience to carry, they can become scratched, cracked, broken, or the numbers on them may become unreadable, leaving the consumer without access to the financial account represented by that token. Five, because of prevalent fraud, merchants often require consumers who present a check or card to present identity verifying information such as a photo ID in addition to the token representing access to a financial account in order to verify that the person presenting the token is its rightful owner. This adds time and expense to the payment process for the merchant.
Tokens, specifically credit and debit cards, have revolutionized the way consumers shop and have given consumers more financial protection and freedom. More people today who carry credit and/or debit cards instead of cash do so for convenience or funds security purposes. However, despite their size and security advantages, the consumer is still forced to carry a different token for each account, is still forced to find and present that token during a purchase, and is often required to present additional photo identification to verify that they are, indeed, the account holder of the presented token. The token-based financial system, although it works, is still not as secure or convenient as other forms of account presentation could be.
Alternative solutions to the above-described systems include a token-based financial access system combined with a personal identification number (PIN). This is a more secure manner of accepting and processing these financial account tokens but is no more convenient than the original token-based system because it still requires the account owner to carry a token. Another proposed security improvement to the token-based financial access system are smartcards, or tokens equipped with a silicon chip, which record the owning consumer's biometric or PIN and require the consumer to present a biometric or PIN when they use the token. Again, this is a more secure form of the token-based system, yet it provides no more convenience to the consumer. An added downside to the smartcard is its cost of production, which is nearly $3 to $5 per card. And although smart cards are an improvement of the more widely used magnetic token, they are still token-based and are still subject to all factors involved in using a token, including the risk of loss, theft, or counterfeit. What would improve the security, convenience, and cost effectiveness of financial account access while addressing the inherent problems of the token-based system is a tokenless financial access system.
Alternative tokenless financial transaction systems have also been proposed in U.S. Pat. Nos. 5,613,012, 5,615,217, 5,838,812, 5,870,723, 6,230,148, and 6,269,348. However, the systems proposed in these patents are problematic for two main reasons: 1) because they are inefficient in the manner they allocate the work load of the biometric comparison and matching during an identity verifying process and 2) because they do not include functions currently used in credit transactions.
Comparing and matching biometric information at a central database, as these systems propose, requires a powerful central server to perform the matching function of numerous simultaneous transactions. Such a system seems inefficient when the transaction devices that the proposed biometric transaction readers would be linked to have so much unused processing power. By distributing the matching function to various local devices (POS electronic cash registers and other POS transaction devices), the workload on the central database would be reduced, providing quicker, more efficient transactions with inexpensive, already existing devices.
Similarly, a system that only provides a sale function without providing for other important transactions that currently exist in the credit world, such as credit, void, and force, is incomplete and requires merchants to perform such transactions through token-based procedures, a process that not only reintroduces the previously addressed problems of the token but also weakens the significance of the system.
Considering the inconvenience and vulnerability associated with the token-based prior art of financial payments and due to the inefficient and incomplete methods of current biometric-based financial payment systems, what is needed is a system and method financial authorization and transactions that is tokenless, that is secure, that offers the full functionality of current token-based financial payment systems, and that distributes the processing of biometric samples to the point of sale.